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by tgraves83 1964 days ago
Do you think the government is going to tie the currency to bitcoin and we'll be on a bitcoin standard? That would be the equivalent and would mean bitcoin would be insanely valuable so maybe you should buy some.

On the other hand, it's far more likely the fed will stick with fiat currency. You'll still get paid in USD, pay your taxes in USD but bitcoin will exist as an alternative store of value like gold. There is around ~$11 trillion worth of gold above ground. Bitcoin has some properties that could make it a better store of value and much easier to transact with than gold. If it eats into gold's primary use case it will probably be a lot more valuable than it is right now.
1 comments
BenoitEssiambre 1964 days ago
I admit that if central banks and governments don't get in on the dangerous hoarding process, the token bubble might resolve much better than in 1929. Let's hope that's what happens. However, cryptocoins might have stronger network effects and memetic effects than gold which might make them dangerous to the aggregate regardless of central bank involvement. You can buy more things more easily with bitcoin than with gold especially if companies like Tesla start accepting payment in bitcoins.
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tgraves83 1964 days ago
I think cryptocurrencies definitely do have stronger network and memetic effects than gold. I agree with you that something like a bitcoin standard would probably be a disaster.

However, I think of bitcoin as more of an inflationary hedge (even if we don't actually get inflation) or check on central bank monetary policy. So it's ultimately just an alternative asset. It also has some pretty amazing potential as a global settlement network but more so when it's volatility goes down.

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BenoitEssiambre 1963 days ago
The inflationary edge should be capital, inventory, productive investment eg. real stuff, not immaterial crypto tokens.
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tgraves83 1961 days ago
I generally agree. However, these can become bubbles themselves or be overcrowded trades. Plenty of the value in those investments is pure speculation and not productive investment. A typical hedge against equities being overvalued would be bonds but those don't look that attractive right now either. Maybe the world needs another alternative. I would argue the current price of bitcoin is the market agreeing with that.
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